In the automotive industry, more than half of dealership gross profit margin goes to payroll, which means the impact your employees can have on your customers and on your culture can be significant.
According to the 2017 Cox Automotive Dealership Staffing Research, which was conducted on behalf of Cox Automotive by KS&R with consultation from Hireology, the study includes a random representative sample of 50 dealer owners, principals, and GMs (online discussion) about their current dealership staffing practices and challenges; 343 dealership employees (online quantitative survey) about their experience as a dealership employee; and 834 U.S. general population (online quantitative survey) about their opinions about working at a dealership.
Given an average cost of $10,000 per new hire and an annual turnover rate as high as 67 percent for sales positions, a dealership with 100 salespeople can lose $670,000 a year.
How do dealerships meet the challenges of a changing workforce and leverage employees to help increase customer engagement and brand loyalty?
Despite technology advances, car buying remains a “people business.”
Hiring relatively inexperienced sales and service advisers because they seem to be a good personality fit can result in bad hires, high turnover, and associated expenses, the study notes.
Offering only cursory training/orientation (e.g., on OEM products) can lead to lack of job satisfaction and poor employee performance. But, holistic staff training can significantly impact employee performance and result in enhanced brand loyalty.
Holistic Staffing Training:
RECRUIT: 1. Market all opportunities at the dealership to increase interest and demonstrate the variety of roles and careers available (marketing outlets can include recruiting websites, colleges/trade schools, job fairs, social media, local publications, job postings at the brick-and-mortar dealership and on dealer websites, etc.) 2. Treat dealership jobs as careers by providing a long-term path to advancement 3. Be clear when experience or specific skills are required 4. Focus on strong social skills and compatibility with dealership values 5. Communicate the benefits of pay plans and scheduling 6. Actively recruit talent on an ongoing basis 7. Include a variety of levels and personalities in the recruiting process (managers, peers, direct reports, executives) to give candidates an opportunity to meet others, understand the culture, and develop early relationships.
TRAIN: 1. Invest in training employees, particularly during their first year, through • Mentoring programs • Senior staff sharing best practices • Online training • Job shadowing 2. Set clear goals for 30, 60 and 90 days (e.g., learn sales process and CRM system, advance from doing recon and basic maintenance to diagnosing and performing minor repairs, sell X number of vehicles, etc.) and provide feedback on progress 3. Offer cross-training that will enable employees to pursue positions in new areas of the dealership 4. Make sure millennials are prepared for customer-facing positions 5. Provide ongoing training to keep employees engaged.
HOLISTIC STAFFING STRATEGY COMMUNICATE 1. Managers should regularly encourage career development with all of their direct reports by regularly reviewing, discussing and evaluating employee goals, responsibilities and progress 2. Provide a positive work environment by encouraging honest, open and direct communication and fostering respect between all employees, and by creating a comfortable and welcoming workspace 3. Reinforce dealership values by clearly communicating the goals of the organization (e.g., through a mission statement) and then setting an example of how those values are embodied (e.g., community involvement, sales process transparency, giving to charity, customer satisfaction); recognize employees who embody those values.
RECOGNIZE Use awards programs (e.g., “Best Customer Service of the Month”) and incentives (bonuses, time off, gifts cards, employee events) to 1. Praise accomplishments on an ongoing basis 2. Show appreciation for hours employees work. 3. Instill pride in the dealership and acknowledge the value employees bring to customers, the business, and the community.